TSLA - Entegris Wolfspeed FormFactor slip as Citi downgrades trio

2023-04-03 08:05:45 ET

Entegris ( NASDAQ: ENTG ), Wolfspeed ( NYSE: WOLF ) and FormFactor ( NASDAQ: FORM ) fell in premarket trading on Monday as investment firm Citi downgraded the three semiconductor companies for varying reasons.

Entegris ( ENTG ): Analyst Atif Malik lowered his rating on Entegris ( ENTG ) to neutral, citing worries about lower adjusted gross margins in 2023 due to a number of "company-specific and industry reasons."

Wolfspeed ( WOLF ): For Wolfspeed, Malik said that while he's still "positive" on the growth of the silicon carbide market and its move into electric vehicles, there is concern that other vehicle makers may follow Tesla's ( TSLA ) decision to offer low-cost models and use insulated gate bipolar transistor or hybrid-insulated gate bipolar transistor technologies.

During its recent investor day, Tesla ( TSLA ) said that it had discovered a way to use less silicon carbide in its vehicles.

FormFactor ( FORM ): Malik said issues in the Chinese domestic memory market could serve as a "permanent resent" for memory probe demand, thus hurting any multiple expansion.

On the long side, Malik reiterated the firm's preference for semiconductor-related equipment and components, noting Applied Materials ( AMAT ), Lam Research ( LRCX ), Advanced Energy Industries ( AEIS ) and Coherent ( COHR ) are Citi's top picks in the respective groups.

Late last month, Wolfspeed ( WOLF ) announced its intentions to apply for funding from the U.S. CHIPs Act .

Analysts are very mixed on Wolfspeed ( WOLF ). It has a HOLD rating from Seeking Alpha authors , while Wall Street analysts rate it a BUY . Conversely, Seeking Alpha's quant system, which consistently beats the market, rates WOLF a SELL .

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